Lifeway Foods, Inc., the leading U.S. supplier of organic and non-organic kefir cultured dairy products, on Tuesday reported a first quarter net loss of $388,000, or -$0.02 per share, on sales of $24.6 million, down 14.4 percent.
The Morton Grove, Ill.-based company (Nasdaq: LWAY) produces cupped kefir and cheese, frozen kefir, specialty cheeses, probiotic supplements and a ProBugs line for kids.
Lifeway said the sales decline for the first quarter ended March 31 “was driven by lower volumes of our branded drinkable kefir and cupped kefir and Skyr sales.”
Gross profit as a percentage of net sales for the quarter was 25.6 percent, down from 28 percent for last year’s first quarter.
“The decline versus the prior year period was primarily due to the unfavorable impact of operating leverage that arises from lower net sales relative to fixed costs, increased trade promotion investment, and higher freight costs, partially offset by an increase in pricing which commenced during second quarter 2018, and a reduction in variable costs,” the company said. “Additionally, depreciation expense increased reflecting the continued investment in manufacturing improvements.”
Shares of Lifeway closed Tuesday at $2.74, up 5.4 percent. The company’s stock has a 52-week low of $1.81 and a 52-week high of $6.54. Lifeway has a market cap of $43.3 million. Since March 2015, when the company’s shares hit an all-time high of $21.90, Lifeway has shown a consistent decline, especially with recent drops in revenue and squeezed margins.
For all of 2018, Lifeway reported a $3.1 million loss for 2018 on sales of $103.4 million, down 13 percent. For all of 2017, Lifeway reported a loss of $346,000 on sales of $118.9 million, down 4 percent.
Since 1999, France-based Danone S.A., the world’s largest yogurt producer, has owned 22 percent of Lifeway’s stock. The Smolyansky family, including Ludmila, Julie, and her brother Edward, own the majority of Lifeway’s common stock.